Profit Maximizing Employment

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stackelberg

I have changed the values and need the model to plug my numbers in. Please solve with explanations. 1. The inverse demand curve for a Stackelberg duopoly is P = 5,000 - 3Q. The leader's cost structure is CL(QL) = 1250 + 10QL. The follower's cost structure is CF(QF) = 250 + 20QF. a. Determine the reaction function for the follower. b. Determine the equilibrium output levels for both the leader and the follower. c. What are the profits for the leader? For the follower?

game theory

Solve with expanation You are the manager of a firm in a new industry. You have gotten the jump on the only other producer in the market. You know what your competitor's cost function is, and it knows yours. Your products, although different to experts, are indistinguishable to the average consumer. Your marketing research team has provided you with the following market demand curve: Q = 1,250 - .5P. Your cost function is CA(QA) = 180 + 8QA. Your competitor's cost function is CB(QB) = 350 + 6QB. Your diligent effort will allow you to decide how much of your product to provide and allow you to place it on the market shortly before your competitor will be able to make ... click for more

game theory

Solve and explain 3. You are a potential entrant into a market that previously has had entry blocked by the government. Your market research has estimated that the market demand curve for this industry is P = 22,500 - 75Q, where You estimate that if you enter the market, your own cost function will be Cy(Qy) = 50,000 + 3,000Qy. The government has invited your firm to enter the industry, but it will require you to pay a one-time license fee of $100,000. You do not know the cost functions of the firms presently in the market; however, the price is now $16,000. Last year 87 units were sold by existing firms. Would you choose to enter this market? Explain.

nash equilibrium

Solve and explain 5. You are considering entering a market serviced by a monopolist. You currently earn $0 economic profits, while the monopolist earns $5. If you enter the market and the monopolist engages in a price war, you will lose $5 and the monopolist will earn $1. If the monopolist doesn't engage in a price war, you will each earn profits of $2. a. Write out the extensive form of the above game. b. There are two Nash equilibria for the game. What are they? c. Is there a subgame perfect equilibrium? Explain. d. If you were the potential entrant, would you enter? Explain why or why not.